- Chapter 13 bankruptcy is often referred to as "restructuring" because none of your debts are expunged as is the case in a Chapter 7 bankruptcy. Instead, your debts are reorganized under the terms of a repayment plan that is submitted along with your bankruptcy paperwork. This repayment plan must account for all your finances and show your ability to repay your debts within a three to five year time period.
- Real property such as a home or building may be included in your restructured debts as part of your repayment plan in a Chapter 13 bankruptcy. This is a stark difference over a Chapter 7 bankruptcy which does not allow secured debts like home loans or small business loans to be included.
- All foreclosure proceedings are required to cease the moment you file for Chapter 13 bankruptcy. The court automatically informs your creditors, in writing, that you have filed for bankruptcy protection so you don't have to do that yourself. This means the bank or other lending institution that holds your mortgage cannot call your home or place of business about debt related matters and cannot force you out of your home while your Chapter 13 bankruptcy is being decided.
- If your repayment plan is approved by the court, your lending institution cannot continue foreclosure proceedings on your real property, and you get to keep the property as long as you make timely payments to your court-appointed trustee. The trustee forwards your payments to your creditors. You do not have to deal directly with your creditors while in Chapter 13 bankruptcy. Your court-appointed trustee also retains broad powers to oversee your finances during this time and to ensure you're not making poor financial decisions that could endanger your ability to adhere to your repayment plan.